Signs That More Are Ready To Put Their Properties On The Market

A report from The Title Report. “During the four-week period ending Sept. 16, nearly 27 percent of home sellers reduced their listing price by at least 1 percent, according to Redfin. Redfin said the 26.6 percent of home sellers who reduced their price during that period is the highest level on record since it began tracking the metric in 2010. ‘In a market where we’re seeing more inventory, sellers may choose to use price reductions to continue to generate interest in their home for sale,’ said Jessie Culbert, a Redfin agent in Seattle.”

“According to Redfin’s analysis, the share of home sellers who dropped their price increased 4.8 percent from the same period a year earlier, when 21.7 percent of homes had a price drop. Redfin said the share of homes with price drops has posted year-over-year gains consistently since late March.”

“The metropolitan statistical areas with the biggest year-over-year increases in the share of homes with price drops during the period were Las Vegas (+12.3 points to 28.1 percent); San Jose, Calif. (+10.7 pts to 25.7 percent); Seattle (+10.1 pts to 37.1 percent); and Atlanta (+9.0 pts to 27.9 percent).”

From Fox Business. “The housing market may be showing some signs of improvement. In some big cities, housing inventory even increased in the third quarter.”

“In San Jose, California, for example, the number of homes for sale increased by 70 percent while the affordability of starter homes rose by 110 percent – though the area remains among the priciest in the country. In Oakland, California, inventory rose by 26 percent, and by 20 percent in Orange County, California.”

From MarketWatch. “Rates for home loans jumped along with yields in the broader bond market, taking financing costs to a recent high and raising fresh questions about the effect of another headwind on a housing market that’s already sputtering.”

“The 30-year fixed-rate mortgage averaged 4.72% in the September 27 week, up from 4.65%, mortgage liquidity provider Freddie Mac said. That marked the fifth straight weekly gain for the benchmark product, and took it to its highest point since April, 2011.”

“The past week has brought a flurry of housing data, none of it rosy. In August, sales of existing homes were flat, sales of new homes were higher but sales tallies in previous months were marked sharply down from initial estimates, and home-contract signings swooned.”

“The chief economist for the National Association of Realtors, Lawrence Yun, pointed to signs that homeowners are more ready to put their properties on the market as prices keep moderating. ‘As long as there is job growth, rising mortgage rates will hinder some buyers,’ Yun said. ‘But job creation means second or third incomes being added to households which gives consumers the financial confidence to go out and make a home purchase.’

“But only time will tell if this soft patch re-energizes the market by evening the sharply unequal playing field a bit more in favor of buyers, or if more people decide to sit it out and rent for a while.”

‘The metropolitan statistical areas with the biggest year-over-year increases in the share of homes with price drops during the period…San Jose, Calif. (+10.7 pts to 25.7 percent)…In San Jose, California, for example, the number of homes for sale increased by 70 percent while the affordability of starter homes rose by 110 percent’

These people in San Jose really want to move all of a sudden. And they are having a discount!

San Jose is probably more overpriced than San Francisco. The only direction prices can go are downward. Nobody is going to spend thirty years of their life paying down a $1M mortgage for a 3/2 rancher no matter how nice the weather.

“According to Redfin’s analysis, the share of home sellers who dropped their price increased 4.8 percent from the same period a year earlier, when 21.7 percent of homes had a price drop. Redfin said the share of homes with price drops has posted year-over-year gains consistently since late March.”

In fact, the share increased 4.8 percentage points which is a 22% increase (from 21.7 to 26.5), but of course the lower version of the number is reported. If this were an increase in median sales price, you can bet they would report the larger number.

“But only time will tell if this soft patch re-energizes the market by evening the sharply unequal playing field a bit more in favor of buyers, or if more people decide to sit it out and rent for a while.”

Come on Larry-boy, we all know which one it will be. It’s not like we haven’t been down the same road before.

You guys are number 1 at everything. Joking aside, I would love to see LV crash and burn worse than last time. Too many CA speculators in that market. My wife and I used to love going to LV. Love the buffets, free valet, “cheap” rooms…now the buffets suck, no more free valet or parking (even for customers!), and too many resort and BS fees. The wife still wants to go but only when friends go too.

Yes, and 1 dollar shrimp coctails, cheap drinks and other perks on the strip. Now it’s 4 buck bottled water and high prices on everything. No matter. If you have a rental car just go across the interstate to a convenience store and get a 24 pack of you fav drinks and refrigerate in your hotel room and take down with you. No need to get ripped off when you go there. Great place otherwise.

Just by eyeballing the September sales in my West LA zip code, it looks to me like the average reduction is about 3%, and the percentage of houses that sold at reduced prices is much higher (although a couple still sold above asking).
Ben has been pointing out something that has me really puzzled. It looks like the reductions are pushing outward from “nicer” areas instead of coming from less desirable zip codes and pushing down the higher end like last time around.
If that is the case, there is no telling how this may play out. If more expensive zip codes drop their prices, the less expensive ones are going to follow suit, but then that may in turn push down pricey areas even further before the process has run its course (barring bailouts, politics and all that, as we all well know).
Maybe we will get to truthfully say: “This time it’s different.”

“The 30-year fixed-rate mortgage averaged 4.72% in the September 27 week, up from 4.65%, mortgage liquidity provider Freddie Mac said. That marked the fifth straight weekly gain for the benchmark product, and took it to its highest point since April, 2011.”

Awesome news that mortgage rates are normalizing, as interest payments in the normal range are one of the pillars of affordable housing prices.